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SavannahYear 8
← Citizenship
CitizenshipRenting and buying a home30 min★★★ difficulty

Rent or buy? Comparing the numbers

'Renting is dead money' and 'buying is always better' are slogans, not answers. This lesson compares two real households over five years and shows which questions actually decide it.

Lesson overview

What you'll learn in this lesson

Understand the concept of a personal budget, opportunity cost, and the balance between managing money day-to-day and planning for the future

Key learning points

  • • Two households, same street
  • • Who is ahead?
  • • Costs that only fall on one side
  • • The real deciders

This lesson at a glance

  • 30 minutes
  • 18 parts to scroll through
  • 4 quick checks
  • Marked quiz at the end
  • Gentle pace: short sittings with pauses

Words to know

conceptpersonalbudgetopportunitybalance

Scroll down — the lesson carries on below

Part 1 of 18 · Discover6%
1

Watch & discover

Part 1 of 18

Watch first

Rent or buy? Comparing the numbers

An English teaching video on this topic from UK Finances . Watch it, then scroll down for the lesson.

In a nutshell

Understand the concept of a personal budget, opportunity cost, and the balance between managing money day-to-day and planning for the future

2

What you already know

Part 2 of 18

Before we start

What you already know

You can compare monthly and yearly totals and know how a mortgage payment splits into interest and debt.

Recap: How a mortgage actually worksRecap: The true cost of running a home
3

Key words

Part 3 of 18

Key words

Words you'll need today

Equity
The share of a property's value you own outright.
Opportunity cost
What you give up by choosing one option over another.
Flexibility
How easily you can move or change your plans.
Maintenance
Repairs and upkeep, paid by the owner, not the tenant.
Negative equity
Owing more than the property is worth.
4

Learning cycle

Part 4 of 18

Learning cycle 1 of 2

Five years, two households

A short piece of teaching, then a check to make sure it has landed.

5

Explore the idea

Part 5 of 18

Learn

Two households, same street

Amina rents at £900 a month: £54,000 over five years, and she owns nothing at the end. Ben buys the identical house for £200,000 with a £20,000 deposit, paying £1,032 a month. Over five years he pays £61,920, of which roughly £41,000 is interest and £21,000 clears debt. Add maintenance at £150 a month and Ben spends nearer £70,900.

6

Explore the idea

Part 6 of 18

Learn

Who is ahead?

Ben's spending is £16,900 higher, but he has turned £21,000 of it into equity, plus his original £20,000 deposit. If the house holds its value he is roughly £4,000 better off, and considerably more if prices rise. If prices fall 10%, his £200,000 house is worth £180,000 against a £159,000 debt, and the £20,000 deposit has mostly gone. Amina's worst case is a rent rise; Ben's is negative equity.

7

Quick check

Part 7 of 18

Quick check

Rent of £900 a month over five years totals:

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Reset break

Part 8 of 18

Pause

That's sitting 1 of 2 done

Stretch, get a drink, look out of the window. There is no timer and nothing is counting down — your place is saved, so you can come back in five minutes or tomorrow.

Stop here for now
9

Quick check

Part 9 of 18

Quick check

Of Ben's £61,920 in payments, about £41,000 is interest. The rest:

10

Learning cycle

Part 10 of 18

Learning cycle 2 of 2

The questions that decide it

A short piece of teaching, then a check to make sure it has landed.

11

Explore the idea

Part 11 of 18

Learn

Costs that only fall on one side

Owners pay for the boiler, the roof and the buildings insurance; tenants do not. Tenants can be asked to leave at the end of a term or face a rent rise; owners cannot. Owners pay thousands in fees to buy and to sell, which is why buying rarely pays off if you move within two or three years. Tenants can move for the cost of a van.

12

Explore the idea

Part 12 of 18

Learn

The real deciders

Three questions settle it, and none of them are about slogans. How long will you stay — under three years favours renting, over five favours buying. How secure is your income — a mortgage is a fixed commitment a tenancy is not. Do you have the deposit and the fees without emptying your savings — because an owner with no emergency fund is one boiler away from a credit card.

13

Quick check

Part 13 of 18

Quick check

Which cost falls on the owner but not the tenant?

14

Quick check

Part 14 of 18

Quick check

Someone likely to move within two years is usually better off:

15

Common mix-ups

Part 15 of 18

Common mix-ups

Things people often get wrong

  • Calling rent 'dead money' while forgetting that mortgage interest is also money you never see again.
  • Comparing rent with a mortgage payment only, ignoring maintenance and buying fees.
  • Assuming house prices only ever rise.
16

Challenge round

Part 16 of 18

Game · Sort it

Which of these are true?

Drag each card into the right column. Tap a card first if dragging is fiddly.

True

Not true

17

Mastery quiz

Part 17 of 18

Marked quiz

End of lesson quiz: Rent or buy? Comparing the numbers

3 questions, marked with the reasoning shown. No timer.

  1. 1. Negative equity means:

  2. 2. A £200,000 house falling 10% in value is worth:

  3. 3. The strongest argument for renting is:

18

Lesson round-up

Part 18 of 18

Lesson round-up

Ready when you are

Quiz score

Not sat

Games

Not played

Points this lesson

0

Best run

0 in a row

Luna: 0 out of 4 on the practice checks. Only if you feel up to it — one more?

Ask Luna

Do the work

Your written work for this lesson

This is the part you'd do in your book at school. Pick the pieces below, write here or on paper, and photograph anything you draw or work out.

Case study

Should the town centre have a curfew for under-16s?

After a rise in reported vandalism, Harbrook council proposed that under-16s should not be in the town centre after 9 pm without an adult. Police recorded 62 incidents last year, most between 9 pm and midnight. Shopkeepers signed a petition supporting the plan.

A youth council objected. They pointed out that most young people in town at night were going home from sports clubs or work, that the plan punishes a whole group for the acts of a few, and that the library and the bus interchange are in the town centre. They asked instead for a late bus and a youth space.

The council voted to trial the curfew for six months and to publish the crime figures at the end.

Written for Good Learning Co.

Reading questions

  1. Give the strongest point on each side of the argument, using a fact from the case.
  2. Whose rights and whose responsibilities are involved here? Explain both.
  3. Write your own view on the curfew with reasons and one example.

  • Reading and response

    Reading

    Read the case in the lesson again and write what you think should happen, and why it is fair. Use one fact from the case as evidence.

    2 paragraphs (PEE)

  • Extended writing

    Writing

    Write your answer to the lesson's big question in full: the strongest point on each side, then your own view with reasons and an example.

    250–350 words

  • Reading log

    Reading

    Find one news story this week that links to this lesson. Note the headline, where you read it, and how it connects.

    1 story, 4–5 sentences

  • Two sides of the argument

    Writing

    Write the strongest point for, the strongest point against, and then your own view with a reason.

    3 paragraphs

  • Poster or leaflet plan

    Diagram

    Plan a leaflet that explains this right or responsibility to someone your age, then photograph it.

    1 planned page

Saved as you type.

Part 1 of 18 · Watch & discover

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